Wealth Of Most Americans Down 55% Since Recession

This why the private Federal Reserve has been artificially propping up the stock market; rising stocks give the illusion of increased household wealth. However, they call it a “bubble” for a reason. Stock gains are merely rising in proportion to the overall devaluation of the dollar. That is to say, stocks are being energized while our buying power is being sacrificed, meaning, a destruction of wealth is taking place, rather than the creation of wealth. The Fed could pump up stocks to 60,000 points if they wanted to, but ultimately, the health of the REAL economy will fall into disrepair. In the end, stocks will implode too. Sadly, many Americans who use the DOW as their only indicator of fiscal success will be sideswiped when this occurs…

Brandon Smith, Associate Editor

Increasing housing prices and the stock market’’s posting all-time highs haven’t helped the plight most Americans. The average U.S. household has recovered only 45 percent of the wealth they lost during the recession, according to a report released yesterday from the Federal Reserve Bank of St. Louis.

This finding is a very different picture than one painted in a report earlier this year by the Fed that calculated Americans as a whole had regained 91 percent of their losses. The writers of the report released yesterday point out that the earlier number is based on aggregate household-net-worth data. However, this isn’t adjusted for inflation, population growth or the nature of the wealth. Further, they say much of recovery in net worth is because of the stock market, which means most of the improvement has been a boon only to wealthy families.

“Clearly, the 91 percent recovery of wealth losses portrayed by the aggregate nominal measure paints a different picture than the 45 percent recovery of wealth losses indicated by the average inflation-adjusted household measure,” the report said. “Considering the uneven recovery of wealth across households, a conclusion that the financial damage of the crisis and recession largely has been repaired is not justified,” the researchers said.

Household wealth plunged $16 trillion from the top of the real estate bubble in the third quarter of 2007 to the bottom of the bust in the first quarter of 2009. By the last three months of 2012, American households as a group had regained $14.7 trillion.